Manufacturing Surveys Start Out Badly

Business conditions weakened for New York State manufacturers for a third consecutive month in August. The general business conditions index fell four points to -7.7. The new orders index also fell, inching down to -7.8; the negative reading—the third in a row—indicated that orders had declined. The shipments index held steady at 3.0, a sign that shipments were slightly higher over the month. The unﬁ lled orders index continued to drift down, falling three points to -15.2

None of that reads well and it weakens hope that the deterioration we saw in the last couple of months was a blip.

I see Manufacturing Surveys this month as critical. Three straight disappointing months makes a trend. If they call come out badly it’s a pretty clear sign that manufacturing is weakening.

This is troubling given that manufacturing was providing strong support during the recovery. The slight upward trend in manufacturing jobs was in contrast to 15 years of downward trend.

While it was always going to be the case that the downward trend was likely to reassert itself, I would have hoped that it did not do so before construction turned around and state and local government stabilized.